Where directors of a company allow their personal financial interests to interfere with their duties to the company the consequences can be far-reaching, as illustrated by the recent judgment of the Commercial Court of the Gauteng Division of the High Court of South Africa in Atlas Park Holdings (Pty) Ltd v Tailifts South Africa (Pty) …
Directors have a duty of disclosure where personal interests may be in conflict with that of the company and other stakeholders in the company. Section 75 of the Companies Act, 71 of 2008 (“the Act”) describes the circumstances where this duty of disclosure to the board of directors or shareholders applies. When does the duty …
Director’s duty to disclose financial interests by Carl Prinsloo Read More »
It is a well-established principle that a company is a separate juristic person, distinct from its shareholders and directors. This is significant, because it implies ‘limited liability’ – the shareholders will not be held liable for the debts incurred by the company. Only in exceptional circumstances will the courts impose liability on shareholders for the …
Section 71 of the Companies Act (“the Act”) provides two options for removing a director. First, by an ordinary resolution adopted by the shareholders of the company; and second, by a resolution of board members, other than the director concerned. If shareholders want to remove a director (the first option), must the director be informed …
Should reasons be given when shareholders remove a director? Read More »
Section 66(1) of the Companies Act, No. 71 of 2008 (“the Act”) provides that the board of directors is responsible for the management of the business and affairs of a company. Section 66 further provides that at least 50% of directors of a profit company must be elected by the shareholders. The other 50% can …
Hiring and Firing Directors: Be mindful of the traps Read More »
In terms of the previous Companies Act directors could generally only act with the consent or approval of shareholders in a number of cases. The Companies Act 71 of 2008 (“the Act”) grants more default powers to directors than the previous Company Act. The increased powers come at a cost to directors: they are more …
Directors of companies: Liability, Indemnification and Insurance Read More »